5 IMPORTANT JUDGMENTS ON ARBITRATION (2021) | Rest The Case

The Judicial System has been head high in keeping its competency in matters of dispute resolution for years. However, Alternate Dispute Resolution has evolved in many ways to make it systematically efficient for all. One such widely adopted ADR is Arbitration. The non-exclusivity in conflict resolution gave rise and shine growth to Arbitration.

Incidents around the world have time and again demonstrated that the collapse of several corporate or banking intermediaries could majorly hamper courts efficiency and create socio-economic trouble for a state. Having an alternate review mechanism is more than relief; it's reformative for the judicial system. Speaking of which, here we have listed 5 prominent arbitration judgements in 2021 that changed to face of ADR in India - 

1. M/s. N.N. GLOBAL MERCANTILE PVT. LTD Versus M/s. INDO UNIQUE FLAME LTD. & OTHERS

Decided on: 11 January 2021

Whether an arbitration agreement would be non-existent, invalid or unenforceable if the underlying contract were not stamped as per the Stamp Act?

The Supreme Court held that between the parties, an arbitration agreement is an independent agreement. It is not chargeable to payment of stamp duty, and non-payment of such stamp duty on the commercial contract would not render the arbitration clause unenforceable or invalidate it since it has an independent existence of its own. 

2. Amazon.Com NV Investment Holdings LLC v. Future Coupons Private Limited & Ors 

Decided on: March 18 2021

What is the legal status of an Emergency Arbitrator, and Whether a remedy can be obtained from the emergency arbitrator under the Arbitration and Conciliation Act?

Section 2(6) of the Arbitration and Conciliation Act gives freedom to the parties to authorize any person, including an institution, to determine the disputes between the parties. The order/award passed by the Emergency Arbitrator is binding on all the parties. But, they do not bind the subsequently constituted Arbitral Tribunal. Moreover, the Arbitral Tribunal is empowered to reconsider, modify, terminate or annul the order/award passed by the Emergency Arbitrator. 

The important characteristics of an Emergency Arbitration are that the Emergency Arbitrator has the power to deal only with Emergency Interim Relief Application within a fixed time frame of about 15 days. The Emergency Arbitrator cannot continue after the formation of the Arbitral Tribunal; the Emergency Arbitrator‟s order/award can be reviewed/altered by the Arbitral Tribunal. 

Lastly, the order passed by the Emergency Arbitrator is an order under Section 17(1) and enforceable as an order of this Court under Section 17(2) of the Arbitration and Conciliation Act.

3. Indus Biotech Private Limited vs Kotak India Venture (Offshore) Fund (earlier known as Kotak India Venture Limited) & Ors

Decided on: March 26

Whether an application u/s 8 of the Act is maintainable if already a petition u/s 7 of the Indian Bankruptcy Code is pending?

The Apex court held that If any proceeding is pending before the Adjudicating Authority under Section 7 of IB Code, if such petition is admitted upon the Adjudicating Authority recording the satisfaction with regard to the default and the debt is due from the corporate debtor, any application under Section 8 of the Act, 1996 made thereafter will not be maintainable.

In a situation where the petition under Section 7 of IB Code is yet to be admitted and, in such proceedings, if an application under Section 8 of the Act, 1996 is filed, the Adjudicating Authority is duty-bound to first decide the application under Section 7 of the IB Code by recording a satisfaction with regard to there being default or not, even if the application under Section 8 of Act, 1996 is kept along for consideration.

4. Megha Enterprises & Ors. Vs M/s. Haldiram Snacks Pvt. Ltd.

Whether a court can interfere with the arbitral award on the ground of nature of inference drawn by the Arbitral Tribunal from the evidence on record?

The Court held that the evaluation of the evidence by the Arbitral Tribunal may be incorrect, and the court might have taken a different view towards the evaluation of evidence, but the court cannot interfere with the arbitral award merely on the ground that it does not agree with the inference drawn by the arbitral tribunal from the evidence led by the parties. 

5. Whether the seat or venue of the arbitration can be shifted by mutual consent of the parties?

The Supreme Court held that Section 20(1) of the ARBITRATION AND CONCILIATION ACT, 1996 act provides that the parties are free to agree on the place or venue of the arbitration. Once the parties mutually agree upon the seat of arbitration, the new seat of the agreed seat will be vested with exclusive jurisdiction. 

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Author: Papiha Ghoshal